Retirement Systems of Alabama shows earnings growth

By Dana BeyerleTimes Montgomery Bureau

Published: Thursday, November 29, 2012 at 5:57 p.m.

Last Modified: Thursday, November 29, 2012 at 5:58 p.m.

MONTGOMERY — The Retirement Systems of Alabama had solid earnings for the past fiscal year, but the looming fiscal cliff in Washington threatens continued growth, Chief Executive Officer David Bronner said Thursday.

Bronner on Wednesday reported 18 percent earnings to the Employees Retirement Systems board. Next week, he said, he plans to report 18.3 percent, one-year growth to the Teachers Retirement System board.

The third component of the RSA, the Judicial Retirement System, had investment growth of 19 percent for the year ending Sept. 30, Bronner said.

“It just means that in the case of the employee system, it grew by $1 billion,” he said. “What it means is we did well this last year during the turmoil.”

Total ERS contributions from the state, employees and investments is about $1.96 billion this year, Bronner said. Subtract payments of $904 million and ERS’ net increase was about $1.058 billion. It has $9.2 billion in assets.

Bronner said since the growth rate is spread out over five years, it still is being affected by the 30 percent recession losses in 2008.

One of the RSA’s signature investments, a 53-story office building in Manhattan, was flooded in lower floors by Hurricane Sandy a month ago.

The building known as 55 Water Street was to have reopened Thursday, but a small fire on Thanksgiving Day and lack of sufficient operating elevators pushed back the reopening date. “The storm got it and got all of lower downtown, and it’s been out of commission since,” Bronner said.

The investment nets $80 million in rent a year, Bronner said. “So the problem is that until I can get open, it’s costing me (a) gross $15 million in rent a month, which is a lot of money,” he said.

The fiscal cliff in Washington and whether President Barack Obama will continue to insist on tax increases on the wealthiest 2 percent and allow Bush-era tax cuts to end Dec. 31 on the other 98 percent could affect the RSA.

“We’re a captive of Wall Street,” Bronner said. “The fiscal cliff going to dramatically affect the retirement system if you create a recession in the United States, a disaster like 2008.”

<p>MONTGOMERY — The Retirement Systems of Alabama had solid earnings for the past fiscal year, but the looming fiscal cliff in Washington threatens continued growth, Chief Executive Officer David Bronner said Thursday.</p><p>Bronner on Wednesday reported 18 percent earnings to the Employees Retirement Systems board. Next week, he said, he plans to report 18.3 percent, one-year growth to the Teachers Retirement System board.</p><p>The third component of the RSA, the Judicial Retirement System, had investment growth of 19 percent for the year ending Sept. 30, Bronner said.</p><p>“It just means that in the case of the employee system, it grew by $1 billion,” he said. “What it means is we did well this last year during the turmoil.”</p><p>Total ERS contributions from the state, employees and investments is about $1.96 billion this year, Bronner said. Subtract payments of $904 million and ERS' net increase was about $1.058 billion. It has $9.2 billion in assets.</p><p>Bronner said since the growth rate is spread out over five years, it still is being affected by the 30 percent recession losses in 2008.</p><p>One of the RSA's signature investments, a 53-story office building in Manhattan, was flooded in lower floors by Hurricane Sandy a month ago.</p><p>The building known as 55 Water Street was to have reopened Thursday, but a small fire on Thanksgiving Day and lack of sufficient operating elevators pushed back the reopening date. “The storm got it and got all of lower downtown, and it's been out of commission since,” Bronner said.</p><p>The investment nets $80 million in rent a year, Bronner said. “So the problem is that until I can get open, it's costing me (a) gross $15 million in rent a month, which is a lot of money,” he said.</p><p>The fiscal cliff in Washington and whether President Barack Obama will continue to insist on tax increases on the wealthiest 2 percent and allow Bush-era tax cuts to end Dec. 31 on the other 98 percent could affect the RSA.</p><p>“We're a captive of Wall Street,” Bronner said. “The fiscal cliff going to dramatically affect the retirement system if you create a recession in the United States, a disaster like 2008.”</p>